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August 27, 2013  Tue 9:23 AM CT

HAL: SEE CHART GET CHAIN FIND STRATEGIES
A trader apparently believes that oilfield-services company Halliburton will stay range-bound after coming off two-year highs reached yesterday.
 
optionMONSTER systems detected the sale of 5,000 April 45 puts for $2.95. This volume compares with previous open interest of just 4 contracts at that strike, so this is clearly a new opening position.

A little more than a minute later, a block of 175,000 shares was sold for $48.0286. Combined with the options, that creates a delta-neutral play that is looking for lower volatility. This means that the trader is counting on HAL to stay range-bound and/or for actual volatility to be less than that implied by the options. (See our Education section)

HAL is down 0.72 percent to $48.09, a day after hitting its highest levels in two years. Shares bounced off support at $40 in late June.
 
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Education & Strategy

Gamma

As we continue to discuss the Greeks, we come to the first of the strike based Greeks called Gamma. Gamma is known as the second derivative, while delta is the first.

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